The number of companies and mortgage
loan originators (MLOs) licensed through the National Mortgage Licensing System
(NMLS) increased by 6 percent and 5.5 percent respectively between the end of
the first quarter of 2011 and the end of the first quarter of 2012 NMLS
reported today. Much of the increase in
numbers occurred because several state agencies were still transitioning their
licensing function to NMLS during later quarters of 2011, the first year that all
state mortgage regulatory agencies utilized NMLS to manage mortgage loan
originator (MLO) licenses, rather than new entries into the market.
NMLS was created by the Conference of State
Bank Supervisors and the American Association of Residential Mortgage
Regulators in 2008. It is the legal
system for licensing non-depository financial services for 53 participating
state agencies and the sole system of licensure for MLOs under the SAFE Act.
At the end of the first quarter of 2012
there were 31,686 licenses issued to 15,883 unique companies and 28,460
licenses given to 17,721 branch offices.
A total of 207,187 individual licenses were held by 105,595 persons.
The number of licenses held by companies
increased by 12 percent and the number held by MLOs increased by 13 percent
from one year earlier. Again, some of
these increases were the result of the transitioning referenced above, but the
greater increase in the number of licenses versus the numbers of people or
companies holding licenses is largely the result of an expansion by companies
and individuals into additional states.
NMLS says that the best time to view
licensing numbers and year-over-year changes is at the end of the first quarter
of each year. The number of licenses
drops at the end of December each year because many companies do not renew
their licenses. The number then climbs
throughout the year as new parties enter the system and existing licensees
expand their footprint. For these and
other reasons the end of the first quarter presents the most stable snapshot of
The average number of originators per
company at the end of the quarter was 5.8 and the median was one. Seventy-two percent of the companies had fewer
than five originators and only about 150 had more than 100. Eighty-eight percent of licensed companies
operated out of a single branch and there were 68 mega-companies with more than
Companies and loan originators typically
operate in only one state. Eighty-three percent
of companies and 79 percent of MLOs hold one state license; 12 percent of
companies and 10.6 percent of individuals hold two to five. More than 224 companies and 1,128 individuals
are licensed in 21 or more states.
The largest business activity reported
by company licensees is first mortgage loan brokering (88 percent) with second
mortgage brokering the second most common activity (73 percent) and brokering
home equity loans third (46 percent). Other business activities reported include
issuing VA loans (35 percent), reverse mortgage loans (24 percent), and first
mortgage lending (22 percent).
Twenty-three percent report they also engage in non-mortgage related
Corporations hold 61 percent of the
company licenses with limited liability companies (LLCs) and sole
proprietorship's holding 19 percent and 18 percent respectively. Less than 2 percent of state licenses
companies (334) report being owned by a depository institution. This is 47 more institutions than reported
this a year ago.